Customer Relationship & Management

Assignment

Submitted To :- Mrs. Shalini Gautam

Submitted By :-

Komal Kataria

Semester-IV

Enroll No.-021

Section- A

AGBS, Noida

SYNOPSIS

Jones lang lasalle: reorganizing around the customer ( 2005)

The mandate from colin Dyer, CEO of Jones Lang lasalle incorporated (JLL), & lauralle martin, CFO & COO, was clear : “Establish a commanding presence in our core geographic markets while continuing to grow our profitable corporate account business”.

Although the mandate was no surprise, its execution would not be easy.

The Proposal :-

1) An enhancement of the account-focused integrated-product-based model put in place in 2001, or

2) A re-alignment of the firm’s operations around geography 7 key accounts.

Throughout its history, JLL had focused on providing premier services to its targeted customer base.

At its core, the firm was organized around 3 business units that retained their own profit & loss.

JLL’s focus on large corporate accounts, had shifted its attention away from activities in regional or local markets.

Subsequently, JLL managed to build a thriving local organization.

Industry background

In 2005, real estate accounted for an estimated 12.5% of the total US gross domestic product.

By 2001, global real estate players were executing approx. one-half of all

real estate service transactions worldwide.

Competition for local markets-

By 2004, as economic health had returned to U.S. metropolitan markets, local markets had themselves became a significant growth engine due to the rapid expansion of local companies.

As a result , large firms like JLL, which had shifted its focus to global clients, increasingly looked for ways to take advantage of this opportunity in local markets while not losing sight of their integrated services business.

Customer centricity at JLL :-

The combined firm was the world’s raiding commercial real estate management. Company & the second-

largest real estate investment- management firm, offering a complete range of real estate services in every major global market.

Initially , the 3 autonomous business units had little more in common than recognized expertise in their respective services area & the corporate clients they served. The units were known as TRG, CPS, PDS.

The matrix organization created by the vertical business units & the horizontal client function was supported by JLL’s compensation structure, which in essence , ensured that “ the sum of the parts was greater than the parts alone”

Coordination challenges among groups-

The corporate solutions group & client management grew to keep up with exploding demand, they faced rising coordination challenges in serving large clients across business units & global markets.

Managing trade offs -

Competitor’s that could not take market share from JLL by winning the large MNC clients were attacking the firm’s strong position from other directions for eg.- by intensive penetration of important local markets.

In august 2004, as robert & his team were beginning to articulate options to streamline the operating structure of JLL, a new president & CEO of JLL incorporated was appointed.

Option 1- Build a three- legged stool

Revenues for a particular client, regardless of service offering, would be recorded by the client managers on their P & L’s & total client profitability would be determined after consideration of the inputs the client managers used from JLL

Option 2- Organizational Realignment

Clients group-

Client managers would have P & L responsibility, hiring, firing authority, & full accountability for increasing client profitability.

Market group-

In order to ensure that the clients & markets groups were working together

effectively, an incentive system would be created to reflect both client profitability & regional profitability, with extra benefits for sharing & growing service offerings to clients.

Making a decision-

Roberts was pleased with the work of the task force & would see the merits of each option.

To maintain its competitive edge, JLL needed to be globally & locally oriented at the same time & playing this dual role would require distinctive skills.

Sample of new & expanded relationships-

2001-2005

New relationships

Kaiser permanent

Hospira

U.S general services administration

Arizona state university.

Expanded relationships-

NCR

Master card

Siebel

Coca-cola

Hewitt

General motors

Wind river

As per me JLL should build a three legged stool because, -

The firm would continue to be organized around its 3 core business units(TRG, PDS, CPS) each of which could continue t manage its own P&L. This would be the first leg of the stool.

The client management function would be the second leg & would remain on overlay function, creating a matrix with the 3 business units, & the larger, multi-service clients would be overseen by corporate client managers.

A concerted effort would be made to further streamline this matrix organization.

Some of the improvements would come in the form of:-

a.Enhancing shared IT systems to enable tracking of total client profitability.

b. Empowering client managers( and potentially, regional managers) to make decisions that were in the mutual best interests of the clients & JLL.

c.Increasing reliance on client-performance-based incentive compensation.

d. Enhancing communication & trust between client managers & those within the business units.

The key difference B/w this option & the existing organization was the addition of a third function (or 3rd leg of stool) in the form of a regional organization.

Market areas would be established in such locations by relying first on

existing resources & would be grown both organically & through strategic acquisition.

Each market would have a regional head who would develop a regional strategy & build a local team to own the sales & marketing activities of that region.

Thus, in this model, the corporate client managers & the regional managers would serve as the client- facing, coordination forces for clients or geographies enabling the 3 business units to focus their attention on actual service delivery.

When each of these 3 groups ( client management, business unit, geographic organization) collaborated, they would share the

credit for the transaction with each other using a pre-established formula to ensure that each was properly compensated for collaborating with the others.

The roles responsibilities of the different groups would be rarely defined, & the intersections among the groups would be closely managed.

Regional managers would be rewarded for growing a local client beyond its primary geography.

Although the regional managers would be effectively losing their clients to corporate client managers once the clients grew beyond their local markets the regional managers would have succeeded in

establishing a multifaceted, long-term client relationship for JLL.